© Reuters Harker Fed: Better to delay rate hikes at the right time than to overinflate risk
News November 16 from Associated Finance Press (Editor Niu Zhanlin)On Tuesday (November 15), Philadelphia Fed President Eastern Time, Harker, said that the Fed is expected to slow the pace of interest rate increases as monetary policy approaches a sufficiently restrictive level, and that interest rates will be at a more restrictive level at some point. next year The level of interest remains unchanged in order to play the role of monetary policy.
“Given the austerity measures we’ve already put in place, I expect slower rate increases over the next few months as the policy rate approaches a sufficiently restrictive level,” Harker said at a conference in Philadelphia.
His relatively tame views have injected momentum into the market. On Tuesday, all three major US stock indexes rose across the board. As of press time, the Dow rose 0.94%, the Nasdaq rose 2.23%, and the S&P 500 rose 1.46%.
Harker reiterated his previous view, “As long as we have a sustained and meaningful effort to bring inflation back down, I think we can delay interest rate hikes if necessary. From a policy perspective, rather than risk excessive tightening, it is better delay. at the appropriate time.” interested.”
On November 2, the Federal Reserve raised interest rates for the fourth consecutive time by 75 basis points to curb the highest level of inflation in 40 years. At the same time, a number of Fed officials have begun to indicate that the time to slow rate increases is getting closer, although they also emphasize that this does not mean the end of rate increases.
Federal Reserve Vice Chairman Brainard also released a similar signal on Monday. Brainard emphasized: “It is appropriate to slow down the pace of interest rate rises in the short term. But I think what really needs to be emphasized is that the Fed has done a lot of work, but there are more things waiting to be done.”
Investors now expect the Fed to raise interest rates by 50 basis points at its December policy meeting, following weaker than expected CPI and PPI data, raising hopes that price pressures are starting to ease.
On the other hand, interest rate hikes have yet to cool the hot US labor market. The US added 261,000 non-farm jobs in October, while the unemployment rate remained low at 3.7%, helping to support consumer confidence and spending.
Harker pointed out that there are signs that the US economy is beginning to slow down, and while the job market remains hot, consumer spending and real estate investment have weakened significantly.
